BlockchainIntel has partnered with Dash to aid in regulatory compliance for exchanges and other businesses, increasing Dash’s prospects for integrations.
A provider of transaction monitoring solutions for blockchains, BlockchainIntel analyzes cryptocurrency transactions and addresses and risk scores them based on evidence of possible nefarious activity, giving businesses a clearer picture of whether or not certain funds have been used in a way that is not compliant with regulations. According to Karen Hsu, CEO of BlockchainIntel, partnering with Dash will help businesses to feel more comfortable supporting Dash on their platforms:
“We are excited to work with Dash, exchanges and companies that trade or process payments in digital currencies to help safeguard interactions in their networks. Our goal is to provide people, companies and regulators a way to identify higher risk transactions that leads to increased trust in and continued adoption of digital currencies.”
To facilitate this process, BlockchainIntel leverages an API to automate and risk score transactions and addresses, removing the burden of manually going through a potentially massive blockchain with endless possibilities when seeking evidence of bad activity.
Clearing a hurdle that may open Dash up to new exchange integration possibilities
The new partnership with BlockchainIntel may open up the doors to integrations with services that may not have previously felt comfortable working with Dash due to its optional advanced privacy features. According to Ryan Taylor, CEO of the Dash Core team, the partnership is particularly useful for access to new exchange integrations, including the eToroX platform:
“We are committed to supporting exchange access for our users. We are happy that our partner BlockchainIntel can address new exchange reporting requirements aimed at preventing money laundering and fraud. Companies such as eToroX are able to list Dash because they can provide the information regulators need using BlockchainIntel.”
Hsu believes that increased compliance tools such as blockchain analysis and risk scoring are a key to mass adoption of cryptocurrencies as risk-averse parties seek to shield themselves from fraud, theft, money laundering, and other illegal activities:
Well-done @tylerwinklevoss, @winklevoss and @gemini team! Spotted these gems at Union Station in Washington DC. Makes it pretty hard for regulators and governments to ignore #Bitcoin! And yes, there is/should be a regulated and simple way to do it all! pic.twitter.com/K9pzG5RyjG
— Gabor Gurbacs (@gaborgurbacs) May 21, 2019
“As with the introduction of any new technology, one of the groups that learns to take advantage of it are bad actors. As cryptocurrency becomes more mainstream, both users and regulators don’t want those bad actors to ruin the experience for everyone else.
Regulators want to know that exchanges have a handle on the transactions going through them. It’s important to have the data to show only 1-4% of transactions (for example) going through the exchange have been mixed or that there is low risk of criminal activity. While we can’t promise Dash will get listed more, it should help!”
In particular, the Gemini exchange has repeatedly advertised itself as well-regulated, as “crypto without chaos.” The exchange does not currently support Dash, however it did add Zcash last year, a cryptocurrency both lower in market capitalization and higher in focus on privacy features.
BlockchainIntel’s focus on improving ecosystem safety, not compromising Dash’s privacy
According to Hsu, the partnership with Dash does not include compromising PrivateSend transactions or identifying personal information, but rather identifying risky transactions or possible thefts so that consumers and businesses can decide whether or not they want to engage with the related funds or party:
“First of all, we’re not tracing wallet addresses to individual email addresses, phone numbers or other identifiers. We are not tracing back to who sent PrivateSend transactions. We are analyzing data to identify patterns in aggregated data. Identifying these patterns enables us to provide information on some wallet addresses as belonging to Darknet sites, scams, mixers, exchanges, mining pools and other companies. We provide this information along with a risk score for one or more wallet addresses to our customers. Using that information and other data they might have, our customers determine whether or not to take action. Let’s look at a couple of examples:
- Exchanges today use tools to identify bitcoin addresses that belong to mixers and tumblers. With BlockchainIntel, exchanges can identify PrivateSend transactions just as they do mixed bitcoin transactions. Note that whether a coin has been mixed is one piece of data among many data points that exchanges evaluate before taking action. Other data points include size of transaction and number of times that type of transaction was made. Exchanges take into account all the data points from their tools and internal systems.
- In the case of a theft, victims have reached out to us for help and have submitted official statements to law enforcement. If we see behavioral patterns that are typical of money laundering, we provide that data to law enforcement.”
Cryptocurrency is no stranger to thefts and compromises. Earlier this year, a series of Bitcoin ATMs were victims due to thieves exploiting long confirmation times to double-spend transactions. An Israeli man was recently the victim of a theft of nearly 75,000 Dash, while popular third-party web wallet MyDashWallet was reportedly compromised. Services like BlockchainIntel can help to mitigate these issues and aid victims of thefts in seeking justice.
